Medicaid planning can help many afford nursing home care

While no one can predict the future, what many in New Jersey can at least anticipate is that some day they may need to enter a nursing home. This presents a problem for many — they know they may some day need nursing home care, but their savings (if any) will not allow them to afford a very long stay. Fortunately, the federal government offers a program, Medicaid, which will cover the costs of nursing home care for those who are eligible.

Oftentimes, a person might not initially be eligible for Medicaid when they enter a nursing home. They pay for care on their own until the assets have been depleted to the point in which Medicaid will cover them. States set the level in which a person’s income and assets need to be at or lower than in order to be eligible for Medicaid.

For example, the state may say that an individual cannot have over $2,000 in countable assets in order to qualify for Medicaid. Countable assets may include funds in bank accounts, cash and investments. However, some assets are excluded from the countable assets amount. These include a house if it is worth less than $560,000 (or more, depending on the state), one’s personal possessions and household goods, a single automobile, funeral arrangements that have already been paid for and some (not much) life insurance.

That being said, with some exceptions, unless a person’s spouse or dependent is living in the person’s home, Medicaid can go after that home to reimburse them for the costs of having that person in the nursing home. Once a person is eligible for Medicaid, all of their income is turned over to the program to pay for the nursing home care, minus a small personal allowance — something in the range of $30 to $90. Also, people need to be careful about giving away property in order to become Medicaid eligible, as this could run afoul of the Medicaid “look back” period.

Medicaid can be a great asset for those who need nursing home care, but it is important that the person does not do anything to impede their eligibility. Also, most individuals want to keep as many of their assets as possible, while still remaining eligible for Medicaid. There are legal ways in which this can be done. An elder law attorney can assist clients with their Medicaid planning needs.